I was rereading this, accidentally found it again.
http://rni.org/kanerva/icann94.pdf
The question is how do you form new SDR from bunch of other SDR i.e. how do you build new concepts.
In essence generate two new SDR one dense which solves the problem of accessing “addresses” in brain memory i.e. coincidence triggering.
And the second sparse one that represent cumulative concept that can be passed forward in the hierarchy.
Resembles temporal pooler functionality. One dense SDR for the TM and sparse SDR for the next layer in the hierarchy.
just my 5c, what do you think